There was a time when the socially conscious supply chain was more of a side dish, or perhaps icing on the cake so to speak. For instance, after profits were made, it was a nice-to-have if a company performed some social good in the process. Well, these days, the icing on the cake is now the main dish when it comes to branding. In fact, consumers and employees alike expect organizations to be socially conscious. How much has this permeated the mainstream? According to EngageForGood.com:
- 86% of customers want businesses to have a stand on social issues,
- 77% feel a deeper emotional connection to socially conscious companies relative to businesses following a more traditional methodology,
- 73% of respondents said they would be more likely to defend a company if it was socially conscious.
The statistics above aren’t the only research compiled on how beneficial it can be for a modern company to engage in socially conscious practices. The returns can come in the form of consumer trust, greater visibility, improved shareholder value, and an increase in employee retention.
The pressure, not just from employees and consumers, but also from investors and shareholders is to embrace socially conscious practices and become more responsible for the safety and wellbeing of every individual affected by any phase along the supply chain.
Thinking of a socially conscious supply chain means incorporating social, good governance, and environmental factors into decision-making and all processes. Further, this is about a long-term strategy for improving the economic, social, and environmental value along every phase of the chain.
In 2011, the United Nations Human Rights Council outlined the United Nations Guiding Principles on Business and Human Rights (UNGPs) and provided these three pillars:
- The state duty to protect human rights
- The corporate responsibility to respect human rights
- Access to remedy for victims of business-related abuses
By deploying a socially conscious supply chain, companies secure their place to operate in a more socially conscious world.
Now that you know the reasons, here are four ways you can build a socially conscious supply chain.
Adopt a long-term approach
Remember, a socially conscious supply chain isn’t just a trend. As a result, it is crucial to develop initiatives that are designed for today and in the future. It helps to start with an effective business case and to get buy-in from key stakeholders.
Prioritize long-term growth over short-term gains. It should be a concept that is holistic in nature. Moreover, the focus should be on mitigating risks, branding improvement, and overall cost reduction. Then, implement tracking capabilities to ensure that your supply chain remains socially conscious.
Audit for social conscious protocols
Looking up and down your supply chain, it is vital to determine areas that could become more socially conscious. The objective is to infuse socially responsible practices throughout your supply chain. You can start by screening prospective new suppliers for their processes around
- Social standards
- Environmental standards
Have your supply chain audit your suppliers regularly along those standards. Next, evaluate your suppliers relative to globally-recognized standards around sustainability. Collect data that can be quantifiable and serve as evidence for any decisions you make.
If there are socially conscious violations in your supply chain practices, you have the data to move forward with any resolutions you make. In addition, you can work closely with your partners to provide training around socially conscious practices not just for the executives but for their employees as well.
Consumers want companies to be both transparent and authentic. Naturally, it’s difficult to be authentic without transparency – which is fundamental towards building a socially conscious supply chain. When you can show transparency within your supply chain, you build trust and may even improve your reputation and competitive standing.
To illustrate, many grocers have had to change their purchasing processes over the past decade where they are buying more fresh produce as demand for processed foods continues to wane. Also, many consumers now want to know whether their food was ethically caught and organically grown. The same is true of the coffee industry where customers are moving towards fair trade sourcing practices such as executed by Equal Exchange or Allegro. In terms of the supply chain, the best option is end-to-end transparency.
With this type of transparency, impact assessments can be executed and any associated mitigation can be quickly deployed. Although this strategy may take more upfront investment, it is the preferred approach as opposed to running a supply chain that imposes human rights violations, environmental damage, and is exposed to fraudulent practices. So then, transparency also allows a company to remedy unfavorable scenarios more quickly and not buckle under the strain of bad branding and outdated practices.
Work with minority suppliers
A socially conscious supply chain includes partnerships with minority suppliers. In fact, minority-run businesses have been growing at two times the national average. This is a part of the economy that must be recognized. Additionally, a supplier diversity initiative can positively impact up to 15% of overall earnings.
Not to mention, all suppliers should be treated fairly and offered fair compensation that is on time. Add flexible contract options and onboarding processes, and you’re on your way to a much more socially conscious supply chain.
By taking the steps listed above, supply chain business leaders can improve their branding, reduce their environmental impact, enhance their social impact, and secure their license to operate in a more socially conscious marketplace. What other ways can you think of that will help build a socially conscious supply chain?